FINANCIAL STATEMENT ANALYSIS PROJECT

Financial statement analysis is the process of reviewing and analysing a
company's financial statements to make better economic decisions. These statements include
the income statement, balance sheet, statement of cash flows, and a statement of changes in
equity. Financial statement analysis is a method or process involving specific techniques for
evaluating risks, performance, financial health, and future prospects of an organization.

1. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
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SRI KOLLI NAGESHWARA RAO GANG AYYA
GOVT FIRST GRADE COLLEGE GANGAVATI - 583227.
DIST - KOPPAL
PROJECT REPORT
ON
“A Study On Financial Statement Analysis On C.B.S Bank
Gangavathi.”

Submitted in partial fulfilment of the requirement for the
Degree of
MASTERS OF COMMERCE
(2018- 2019)
Submitted by:
G.VINAY KUMAR
Register No: MC170662
M.COM-2nd Year
Guide by
Dr.Ravi kiran
Co-Ordinator of
Department of commerce

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CONTENTS

CHAPTER l
Introduction to the study
Objective of the study
Need for the study
Methodology
Limitation of the study

CHAPTER II
Industry profile
Company profile

CHAPTER III
Theoretical background

CHAPTER IV
Data analysis and interpretation

CHAPTER V
Findings
Suggestion
Conclusion

Questionnaires
Bibliography

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CHAPTER – 1



 Introduction to the study
 Objective of the study
 Need for the study
 Methodology
 Limitation of the study

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INTRODUCTION :


Financial statement analysis is the process of reviewing and analysing a
company's financial statements to make better economic decisions. These statements include
the income statement, balance sheet, statement of cash flows, and a statement of changes in
equity. Financial statement analysis is a method or process involving specific techniques for
evaluating risks, performance, financial health, and future prospects of an organization.

Finance is one of the powerful strength to every person. The primary function of
any financial intermediaries is to facilitate the allocation and development of economy
resource. The financial intermediaries, by acting as live links between those who are able
willing to save and those we are able and willing to invest productively, influence the
economic activities of the economy. The main function of the financial intermediaries is to
mobilize the savings of the community by offering suitable incentives and to make them
available at a profit to those is need of such savings.

It is used by a variety of stakeholders, such as credit and equity investors, the government,
the public, and decision-makers within the organization. These stakeholders have different
interests and apply a variety of different techniques to meet their needs. For example, equity
investors are interested in the long-term earnings power of the organization and perhaps the
sustainability and growth of dividend payments. Creditors want to ensure the interest and
principal is paid on the organizations debt securities (e.g., bonds) when due.



OBJECTIVES OF THE STUDY :

1. To view the services offered by the CBS bank.
2. To get knowledge about profit and loss.
3. To get practical knowledge about balance sheet.
4. To get knowledge about securities asked for sanctioning loans.
5. To know the progress of the bank.
6. To create the awareness about various functional areas of the bank to the people.
7. To know customer satisfaction at CBS Bank.

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Research Methodology

For the purpose of study secondary data has been used for this purpose various
articles, journals and report of the bank has been studied. In this project various ratio were
studied to find out the financial position of bank.

THE RESEARCH METHODOLOGY : -

 Meaning of research.
 Research problem.
 Research design.
 Data collection method.
 Limitation of study.

 Meaning of Research :-

Research is defined as “a scientific and systematic search for pertinent information on a
specific topic”. Research is an art of scientific investigation. Research is a systematized effort
to gain now knowledge. It is a careful investigation or inquiry especially through search for
new fact in any branch of knowledge. Research is an academic activity and this term should
be used in a technical sense. Research comprises defining and redefining problems,
formulating hypothesis or suggested solutions. Making deduction and reaching conclusions to
determine whether they if the formulating hypothesis. Research is thus, an original
contribution to the existing stock of knowledge making for its advancement. The search for
knowledge through objective and systematic method of finding solutions to a problem is
research.

 Research Problem

The first step while conducting research is careful definition of research problem. To
ERR is the human is a proverb which indicated that no one is perfect in this world. Every
research has to face many problems which conducting any research that’s why problem
statement is defined to know which type of problem a researcher has to face while conducting
any study. It is said that, “Problem well defined is problem half solved.” Basically, a problem
statement refers to some difficulty, which researcher experiences in the context of either a
theoretical or practical situation and wants to obtain the solution for the same.

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 Research Design.

A research designs is the arrangement of conditions for collection and analysis of data in
a manner that aims to combine relevance to the research purpose with economy in procedure.
Research design is the conceptual structure with in which research in conducted. It constitutes
the blueprint for the collection measurement and analysis of data. Research design includes
and outline of what the researcher will do from writing the hypothesis and it operational
implication to the final analysis of data. A research design is a framework for the study and is
used for gathering and analysing the data. It also including the time and cost budget since
most studies are done under these two cost budget since most studies are done under these
two constraints. The design is such studies must be rigid and not flexible and most focus
attention on the following :-

 What is the study about ?
 What is the study being made ?
 Where will the study be carried out ?
 What type of data is required ?
 Where can be required data be found ?
 What period of time will the study include ?
 What will be sample design ?
 What techniques of data collection will be used ?
 How will the data be analysed ?
 In what style will the report be prepared ?


 DATA COLLECTION METHOD.

The present study of data are interpreted and evaluated by keeping in view the principle
objectives of the study. The study is based on both the primary and secondary sources of data.

SOURCES OF DATA :-
The data furnished in the report has been collected from two sources.

1) Primary Data
The primary data means the data which is collected by a researcher from first-hand
sources using methods like surveys, interviews. It is collected with the research project in
mind, directly from primary sources.

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It is collected through interview with manager, accountant and assistant accountant.


2) Secondary Data
Secondary data refers to data which is collected by someone who is someone other then
the user.
It is collected through annual reports of the CBS Bank, pamphlets of co-operative Bank,
Banking theory Books, Banking theory, law and practice and through internet.

 NATURE AND SCOPE OF THE STUDY

This study conducted to analyse financial statement of the company has covered three
years financial statement, balance sheet and deals with the following aspects: Liquidity
analysis, operating efficiency by calculating activity ratios, as well as profitability aspects.
With addition to this comparative & common size statement analysis also made as a part of
this analysis. To this end finding and suggestions are also presented.
The present study as its main title suggests is an investigation on the financial statement
analysis, its impact on bank, and on their customers. It is an in-depth inquiry.
Review of the theoretical studies made in second and there chapter incidentally
indicates that not much has been done in the impact of financial statement analysis.

PERIOD OF STUDY:

The data for a period of 3 years from 2015-16 to 2017-18 has been taken into consideration to
assess.
the financial strength and weaknesses of the company.

TOOLS USED FOR DATA ANALYSIS:
The last 3 years annual report of the company is compiled and tabulated for the purpose of
study.

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TECHNIQUES USED ARE :

Comparative study of Balance sheet
Comparative study of Profit and loss account for the FY 2015-16 & 2017-18.
Trend Analysis
Ratio Analysis
WACC

LIMITATIONS OF THE STUDY

A. Time allotted thirty days were short to study in detail regarding financial statement analysis
in CBS Bank.
B. The study was based on available information and documents.
C. The study was carried out in the light of the limited knowledge.
D. The study is limited to only in Gangavathi.
E. Difficulty in the data collection.
F. Due to the limited time available at the disposable, the study has been confined for a period
of 3 years.

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CHAPTER – 2




 Industry profile
 Company profile

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MEANING OF BANK

According to banking regulation act of 1949 defines the term banking as accepting for
the purpose of lending or investment of deposits of money from the public, repay on demand
or otherwise and withdraw by cheques, draft or otherwise.

HISTORY OF BANKING IN INDIA

Without a sound effective banking system in India it cannot have a healthy economy.
The banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.

For the past three decades Indian banking system has several outstanding achievement to
its credit. The most striking is it's extensive reach. It is no longer confined to only
metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to
the remote corners of the country. This is one of the main reason of India's growth process.

The first bank in India, through conservative was established in 1786. From 1786 till
today, the journey of Indian banking system can be segregated into three distinct phases.
They are mentioned below

 Early phase from 1786 to 1969 of Indian banks
 Nationalisation of Indian banks and up to 1991 prior to Indian banking sector reforms.
New phase of Indian banking system with the advent of Indian financial banking sector
reforms after 1991.

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PHASE I

The general bank of India was set up in the year 1786. Next bank came is bank of
Hindustan and Bengal bank. The East India company established bank of Bengal (1809),
bank of Bombay (1840) and bank of Madras (1843)s independent units and called it
presidency banks. These three banks were amalgamated in 1920 and imperial Bank of India
was established which started as private share holders bank, mostly European share holders

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd, was set up in 1894 with headquarters at Lahore. Between 1906 and 1913,
Bank of India, central bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank
of Mysore was set up. Reserve Bank of India came in 1935.

During the 1st phase the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To
stream line the functioning and activities of commercial banks, the government of India came
with the banking company's Act, 1949 which was later changed to banking regulation Act
1949 as per amending act of 1965 ( Act no 23 of 1965 ). Reserve Bank of India was vested
with extensive powers for the supervision of banking in India as the central banking
authority.

PHASE II

Government took major steps in Indian banking sector Reform after independence. In
1955 it nationalized imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi urban areas. It formed state bank of India to act as the principal
agent of RBI and to handle banking transactions of the union and state government all over
the country.

Seven banks forming subsidiary of state bank of India was
nationalized in 1960 on 19th July, 1969, major process of nationalization was carried
out. It was the effort of the then prime minister of India mrs. Indira Gandhi. 14 major
commercial banks in the country were nationalized
Second phase of nationalization, Indian banking sector reform was carried out in 1980 with 7
more banks. This step brought 80% of banking segment in India under government
ownership
1955 Nationalization of state bank of India

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1959 Nationalization of SBI subsidiaries
1969 Nationalization of 14 major banks
1980 Nationalization of 7 banks with deposits over 200 crores

PHASE III

This phase has introduced many more products and facilities in the banking sector in
its reforms measure. In 1991, under chairmanship of M Narasimha, a committee was set up
by his name which worked for the liberalisation of banking practices

The country is flooded with foreign banks and their ATM stations. Efforts are being
put to give a satisfactory service to customers. phone banking and net banking is introduced.
The entire system became more convenient and swift. Time is given more importance than
money.

The financial system of India has shown a great deal of resilience. It is sheltered from
any crisis triggered by any external macro economics shock as other East Asian countries
suffered. This is all due to flexible exchange rate regime, the foreign reserves are high, the
capital account is not yet fully convertible, and banks and their customers have limited
foreign exchange exposure.


TYPES OF BANKING

o Commercial Bank.
o Industrial Banks. s
o Foreign exchange Banks.
o Co-operative Banks.
o Agricultural Banks.
o Land and Development Bank.
o Saving Banks.
o Central Banks.

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SPECIAL FEATURES OF BANK

 The bank is paying Rs. 5000 to the members for their funeral function if it occurs.
 Rs.25000 to Rs.100000 is paid for the accidental death of members.
 Cash prize is given for the highest score holder in the town for under graduates.
 The Bank is ready to hire a poor student and ready to pay his fees up to degree level.

CO – OPERATIVE BANK :

As per banking regulation Act 1949 Reserve bank of India given authority to co-
operative Banks to do banking business were extended to co-operative Banks. It has been
licensing of existing and new bank branches, sanctioning of credit limits to state co-operative
Banks on behalf of primary co-operative banks.

The present system of banking in India has undergone program of tremendous branch
expansion program which has helped sector banks to mobiles savings substantially for the
hung areas of the country and out funds to the weaker sections of the society. Banks have
penetrated into rural, semi, urban and backward areas.


Banking refers to as Accepting of Deposit for the purpose of lending or investment of
Deposits of money from the public, repayable on demand and withdrawal by cheque, Draft,
and order or otherwise. Banking not only includes the above activities but also subsidiary like
agency services, general utility services etc. Banks play a significant role in the economic
development of the country. Bank performs a number of functions.

The present system of Banking is mass banking than class banking. The larger
number of branches operating in rural and semi urban areas has greatly increased the
memorization of the economy, have raised the share of Financial Institution in the total
financial transactions in these areas and have brought a good part of unorganised sector of the
money market under the control of the Reserve bank of India and Government.

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DEFINITION OF CO-OPERATIVE BANK

" A Co-operative is an autonomous association of persons United voluntarily to meet
common economic, social and cultural needs and aspirants through a jointly owned and
democratically controlled and enterprise."

WHAT ARE CO-OPERATIVE BANKS

The amending Act of 23 of 1965 called banking laws applications to co-operative
bank as.......
1 All the co-operatives are understate or Apex co-operative banks.
2 All the co-operative Banks main principle in state and districts, primary objective which is
the financing of co-operative Banks in their respective states and districts.
3 All the primary non-agriculture credit societies including urban co-operative Bank as have
banks as their principle business and paid up capital and reserve of nominal value of Rs.
100000 or more.
4 It is also known in the form of as financial institution.
5 A co-operative banking which is a company and which has its principle business, the
receiving of deposits, under any scheme and giving loans and other banking facilities to
customers.

PRINCIPLE OF CO-OPERATIVE BANKS

The co-operative principles or guidelines by which co-operative put their values into
practice. The principles are as follows
1. Voluntary and open membership
2. Democratic member control
3. Member economic participation
4. Autonomy and Independents
5. Education, training and information
6. Co-operative among Co-operatives and
7. Concerned for community

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VALUES

Co-operative is based on the value of self-help, self-responsibility, democracy,
equality and solidarity. In the tradition of their founders, Co-operative members believe in the
ethical values of history, openness, social responsibility and caring for others.

PROFILE OF THE BANK

As the Gangavathi being the part of Koppal district is concerned as one of the most
important in field of agriculture. Trade and commerce and in banking sectors is growing at
top level
As the Gangavathi is well known as a "Rice bowl of Karnataka" and also commercial
it is known as "paddy city" and it is famous for the gracious presence of Lord Sri
Channabasava Swami. Totally Gangavathi taluk is very potential in agriculture market and it
is surrounded by more than 140 rice mills 40% of the rice is been exported to foreign
countries like Singapore, Hong Kong and other countries.
The CBS Bank is a residuary a Co-operative bank, which was established in 30th June
1995. It has its branch at Gangavathi. Shri Siddapura Manjunath is the main promoter of the
bank. He started bank with the capital of Rs. 121 lakhs. Earning is Rs. 9600,000 present
capital employed is 1,34,60,100.00 earning is Rs. 68,42,330.45.
In Gangavathi CBS Bank is paying a major role in banking sector, as per day it is
transacting about 2 crores. It has been facing competition from nationalized as well as other
Co-operative banks.
Gangavathi is basically based on only agriculture. So, the bank meets some low
profits in past two years because of famine and also faced some problems in collecting loans
because of single crop.
The Bank is not a community based as Co-operative banks are community based. As
being the potential market in Gangavathi. Shri Siddapura Manjunath ( chairman) planned to
do Co-operative bank with the committee which will be helpful for local traders and
investors. The main aim of the Bank is surrounded by many villages and to give service for
illiterate that by giving awareness of bank for the purpose of the social service.

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HISTORY OF CBS BANK

Sri Siddapur Manjunath is the main promoter of the bank, in 1995 they started the
bank with capital of Rs 1200000 (twelve lakhs) and the shared issued to 1643 members and
with the committee of 13 directors is formed form different religions. The arise not a
community based more co-operative bank are community based. As being the potential
market in Gangavathi, Sri Siddapur Manjunath planned to do co-operative bank with the
committee, which will be helpful for local traders and small investors. The main of the bank
is to give utmost service to the smaller region people as the Gangavathi is surrounded by
many villages and to give service for illiterate that by giving awareness of bank and for the
purpose of social service.

VISION:
To reach up 50 crores in deposits
Bank to convert from schedule co-operative bank with in the year 2020
Extending its service as per the customer performance in about for their continence extending
its branches in some places like Kartagi, Kustagi,Kampli, Koppal & Extension Counter.
Maintain transparency in dealing with customers and invariable fulfil all commitments.
Train employees to render professional and pleasing service. And
Practice judicious management of risks and after service

MISSION
1. Efficiency and effectiveness built on ethical practices.
2. Understanding the needs of customers and offering services.

OBJECTIVES OF CBS BANK

 The bank ensures safety and profitability of assets by due diligence and by adopting
appropriate information technology.
 The Bank main aim is to give opportunity for career advancement of the employees.
 The Bank aims to grow in size and geographical spread by introducing variety of
innovative service.

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MANAGEMENT COMMITTEE

The board of directors are formed under the sec A10

BOARD OF DIRECTORS : NAMES

CHAIRMAN : GIRIYAPPA HOSKERI
VICE CHIARMAN : PANNALAL SURANNA
DIRECTORS : S. SHIVARAMEGOWDA
: K. CHANNABASAYYA SWAMI
: K.KALAPPA
: RAMESH GOWLI
: TIMMANNA MEDAAR
: LATHA M. SIDDAPUR
: MUTTAKKA ARALI
: LATHA MALIPATIL
: NAVALI GURURAJ RAO
: J. TIPPESWAMI
: C. G. JAWALI

DISTINCTIONS:

Over 23 years in service
Pioneered small savings
Wide transaction
Door step customer service
Pioneered designated banker
Free value added service
Technology driver environment and
I nvolvement in social categories.

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SHREE CHANNABASAVA SWAMY SOUHARDHA SAHAKARI BANK
LIMITED
GANGAVATHI.






Mr. Channappa gavisiddappa Javali Mcom : Manager
Mr. M Rabindranath Bcom : Manager loans
Mr. G. Nagesh : Accountant
Mr. Veerabhadrappa Siddapur Bcom : Assistant Accountant
Mrs. Nalini HM Bcom : Junior Assistant
Mr. Allamaprabhu Patil BA : Junior Assistant
Mr. Chandrashekhar Bcom : Junior Assistant
Mrs. Suma HM : Junior Assistant
Mrs. Shobha MBA : Junior Assistant
Mr. Meer shamid : Assistant
Mr. Hanumantha Y : Attender
Mr. Manjunath HM : Attender
Mr. Lachumanna kalmani : Attender







BANK STAFF

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STRUCTER OF ORGANISATION





BOD
CHAIRMAN
VICE CHAIRMAN
GENERAL MANAGER
BANKING
MANAGER
MAINTAINAECE
ACCOUNTANT
ASSISTANT
ACCOUNTANT
STAFF
MANAGER FOR
LOAN
ACCOUNTANT
ASSISTANT
ACCOUNTA
STAFF

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SYSTEM :

The system of an organisation refers to all rules, regulations and producers both
formal and information related to different departments. this will specify the powers and
authority of a particular department. this system in the organisation is well established so as
to take easy and proper decision related to the branch.
In the branch they had maintained the proper system so as to facilitate the proper
function of the organisation. the general manager will look after the total affairs the total
affairs of the bank and he is the CHIEF examiner of the bank and he is the person who has to
finalise in issuing loans and advances in the bank and he is the administrator of the bank there
is two more branch manager in the bank one is banking service manager and another is
manager for loans and advances.
The formula rules and regulations of the bank are in according with the specifications
given by RBI and State co-operative bank. the reserve bank of India act as the watchdog in
the residuary in Co-operative banking system. The overall strategy and decision of the bank
is taken a board meeting of the organisation that includes all the directors and General
manager CEO.
There is a good coordination among the all levels of management in the making
effective decision which will benefit the company as well as employs in achieving their
respective goals.

The company is listed on the main profile I.e.……..

1. Service
2. Honestly
3. Integrity
4. Loyalty

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ACHIEVEMENT FROM 2015 -2018

Sl.no Particular 2015-2016 2016-2017 2017-2018
1 Shareholders 3231 3347 3507
2 Share capital 112.06 117.68 134.60
3 Reserves 1076.96 1145.23 1197.87
4 Deposits 2301.62 2719.84 3043.79
5 Loans and
advances
1846.36 1898.11 2220.87
6 Barrowings - - -
7
Woking capital
( in crores)
34.91 39.82 43.76
8 Investments 1555.13 1863.89 2063.49
9 Net profit 31.39 54.62 68.42
10 Dividend (%) 10% 10% 12%
11 NPA (%) 0% 0% 0%
12 audit A A A

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CHAPTER – III




THEORETICAL BACKGROUND

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INTRODUCTION OF THE TOPIC

Meaning of financial statements
Financial statement refer to such statement which contains financial information about
an enterprise. They report profitability and the financial position of the business at the end of
accounting period. The team financial statement includes at least two statements which the
accountant prepares at the end of an accounting period. The two statement are :-

 The balance sheet
 Profit and loss account

They provide some extremely useful information to the extent balance sheet mirrors the
financial position on a particular data in terms of the structure of assets, liabilities and owners
equites, and so on and the profit and loss account shows the results of operations during a
certain period of time in terms of the revenues obtained and the cost incurred during the year.
Thus the financial statement provides a summarized view of financial positions and
operations of a firm.

Meaning of financial analysis

The term financial analysis is also known as ‘analysis and interpretation of financial
statement’ refers to the process of determining financial strength and weakness of the firm by
establishing strategic relationship between the items of the balance sheet, profit and loss
account and other operative data. The first task of financial analysis is to select the
information relevant to the decision under consideration to the total information contained in
the financial statement. The second step is to arrange the information in a way to highlight
significant relationship. The final step is interpretation and drawing of inference and
conclusions. Financial statement is the process of selection, relation and evaluation.

Features of financial analysis.
 To present a complex data contained in the financial statement in simple and
understandable form.
 To classify the items contained in the financial statement in convenient and rational
groups.
 To make comparison between various groups to draw various conclusions.

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Purpose of analysis of financial statements

 To know the earning capacity or profitability.
 To know the solvency.
 To know the financial strengths.
 To know the capability of payment of interest and dividends.
 To make comparative study with other firms.
 To know the trends of business.
 To know the efficiency of management.
 To provide useful information to management.


Procedure of financial statement analysis

The following procedure is adopted for the analysis and interpretation of financial
statement :-

 The analyst should acquaint himself with principals and postulated of accounting. He
should know the plans and policies of the management so that he may be able to find
out whether these plans are properly executed or not.
 The extent of analysis should be determined so that the sphere of work may be
decided. If the aim is find out. Earning capacity of the enterprise then analysis of
income statement will be undertaken. On the other hand financial position is to be
studied then balance sheet analysis will be necessary.
 The financial data be given in statement should be recognized and rearranged. It will
involve the grouping similar data under same heads. Braking down of individual
components of statement according to nature. The data is reduced to a standard form.
 A relationship is established among financial statement with the help of tools &
techniques of analysis such as ratio, trends, common size fund flow etc.
 The information is interpreted in a simple and understandable way. The significant
and utility of financial data is explained for help in decision making.
 The conclusions drawn from interpretation are presented to the management in the
form reports.

25. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
25
TYPES OF FINANCIAL ANALYSIS

There are different ways of analysis the financial statement :

1) On the basis of process of analysis

a) Horizontal analysis :

This is used when the financial statement of a number of year are to be analysed. Such
analysis indicates the trends and the increase or decrease in various items not only in
absolute figures but also in percentage form. This analysis indicates the strengths and
weaknesses of the firm. This analysis is also called as dynamic analysis because it also
shows the trends of the business.

b) Vertical analysis :

This is used when financial statement of a particular year or on a particular data are
analysed. For this types of analysis we generally use common size statement and the ratio
analysis. It involves a study of quantitative relationship among various items of balance
sheet and profit and loss account. This types of analysis is static analysis because this is
based on financial result of one year. Vertical analysis is useful when we have to compare
the performance of different department of the same company.

Among this two types of analysis, horizontal analysis is more useful because it brings
out more clearly that trends of working of a firm. This gives us more concrete bases for
future planning.

26. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
26
2) On the bases of information available

a) Internal analysis :

This analysis is based on the information available to the business firm only. Hence
internal analysis is made by the management. Internal analysis is more reliable and
helpful for financial decisions.

b) External analysis :

This analysis is made on the basis of published statement reports and information.
This analysis is made by external parties such as creditors, investors, banks, financial
analysis etc. external analysis is less reliability in comparison to internal analysis because
of limited and often incomplete information.

3) On the basis of number of firms

a) Inter-firm analysis:

When financial analysis of two or more companies or firms are analysed and
compared over the number of accounting periods, it is called inter-firm analysis.

b) Intra- firm analysis:

Intra firm analysis is concerned with the analysis of financial performance of different
units or performance or segments of the same enterprises or company. Similarly when
financial statement of two or more years of the same firm are analysed and compared it is
also called as intra-firm analysis.

27. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
27
4) On the basis of objectives

a) Accounting analysis:

Accounting analysis is analysis of past financial performance and involves examining
generally accounting principles and conventions have been applied in arriving at the
values of assets, liabilities, revenues and expenses.

b) Prospective analysis:

Prospective analysis involved developing forecasted financial statement keeping in
view the changes. That are likely to share and effect the business and given the
assumptions about this changes and the limitation of the forecasting technique used. This
is quite complicated analysis.


METHODS / TOOLS OF FINANCIAL ANALYSIS

number of methods can be used for the purpose of analysis of financial statement.
These are also termed as techniques or tools of financial analysis. Out of these, and
enterprise can choose those techniques which are suitable to its requirements.
The principal techniques of financial analysis are :-

a) Comparative financial statements
b) Common-size statement
c) Trend analysis
d) Ratio analysis
e) Cash flow analysis

A) COMPARATIVE FINANCIAL STATEMENTS: -
When financial statement figures for two or more years are placed side-side to
facilitate comparison, these are called ‘ comparative financial statement’. Such statement
not only show the absolute figures of various years but also provide for columns to
indicate to increase or decrease in this figures from one year to another. In addition, these
statement may also show the change from one year to another year on percentage from.
Such cooperative statement are of great value in forming the opinion regarding the
progress of the enterprise.

28. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
28
Objectives or purpose or significance of comparative financial statement

1. To simplify data.
2. To make inter period/inter firm comparison.
3. To indicate the trends.
4. To enable forecasting.
5. To indicate the strength and weakness of the firm.
6. To compare the performance.
7. To analyse expenditure.
8. To analyse profit.

Tools for comparison of financial statement
Comparative financial statement is a tool of financial analysis that depicts change in
each item of the financial statement in both absolute amount and percentage term, taking
the items in preceding accounting period as base.
Comparison and analysis of financial statement may be carried out using the
following tools.

1) Comparative balance sheet:
A comparative balance sheet shows increase and decrease in absolute terms as
well as percentages, in various assets, liability and capital. A comparative analysis of
balance sheet of two periods provides information regarding progress of the business
firm. The main purpose of the comparative balance sheet is to measure the short term
and long term solvency position of the business.

2) Comparative income statement
Comparative income statement is prepared by taking figures of two or more then
two accounting periods, to enable the analysist to have definite knowledge about the
progress of business. Comparative income statements facilitates the horizontal
analysis since each accounting variable is analysed horizontally.


B) COMMON SIZE STATEMENT:

Common size statements are such statement in which the items of financial
statements are covered into percentage of common base. In common size statement,
by assuming net sales as 100(i.e.%) and other individual items are converted as
percentage of this. Similarly in common size balance sheet total assets are assumed to
be 100(i.e.%) and individual assets are expressed as percentage.

29. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
29
Objectives of common size statement:
1) Presenting the changes in various items in relation to total assets or total liability
or net sales.
2) Establishing a relationship.
3) Providing a common base for comparison.

Types of common size statements

1. Common-size balance sheet
A common size balance sheet is a statement in which total of assets or liabilities is
assumed to be equal to 100 and all the figures are expressed as percentage of the total.
That is why it is known as percentage balance sheet.
Common-size balance sheet facilities the vertical since each items of the balance sheet
is analysed vertically.

2. Common-size income statement :
Common-size income statement is a statement is a which the figure of net sales is
assumed is be equal to 100 and all figures of “profit and loss A/c” are expressed as
percentage of net sales. This statement facilities the vertical analysis since each
accounting variable is analysed vertically. One can draw conclusion, regarding the
behaviour of express over period of time by examining these percentages.

C) TREND ANALYSIS:-
Trend percentage are very useful is making comparative study of the financial
statement for a number of years. These indicate the direction of movement over a long
time and help an analyst of financial statement to form of opinion as to whether
favourable or unfavourable tendencies have developed. This helps in future forecasts
of various items. For calculating trend percentage any year may be taken as the ‘base
year’. Each item of because year is assumed to be equal to 100 and on that basis the
percentage of item of each year calculated.

D) RATIO ANALYSIS:-
Absolute figures expressed in financial statement by themselves are meaningfulness.
These figure often do not convey much meaning unless expressed in relation to other
figures. Thus, it can be say that the relationship between two figures, expressed in
arithmetical terms is called a ratio.

30. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
30
“According to R.N.Anthony”
“A ratio is simply one number expressed in term of another. It is found by
dividing one number into another”.
Types of ratios

1. Proportion or pure ratio or simple ratio.
2. Rate or so many times.
3. Percentage.
4. Fraction.

Objectives and advantages or uses of ratio analysis:-

1. Helpful in analysis of financial statement.
2. Simplification of accounting data.
3. Helpful in comparative study.
4. Helpful in locating the weak spots of business.
5. Helpful in forecasting.
6. Estimate about the trend of the business.
7. Fixation of ideal standards.
8. Effective control.
9. Study of financial soundness.

Limitation of ratio analysis

1. False accounting data given false ratio.
2. Compressions not possible of different firms adopt different.
3. Accounting policy.
4. Ratio analysis become less effective due to price level
5. Change.
6. Ratios may be misleading in the absence of absolute data.
7. Limited use of a single ratio.
8. Window-dressing.
9. Lack of proper.
10. Ratio alone is not adequate for proper conclusions.
11. Effect of personal ability and bias of the analyst.

31. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
31
Classification of ratios

In view of the financial management or according to the tests satisfied. Various ratio
have been classified as below:

Liquidity ratios :

There are the ratios which measure the short-term solvency or financial position of a
firm. These ratio are calculated to comment upon the short-term paying capacity of a concern
or the firm’s ability to meet its current obligations.
Long-term solvency and leverage ratios:
Long-term solvency ratios convey a firm’s ability to meet the interest cost and
repayment schedules of its long-term obligation e.g. debit equity ratio and interest coverage
ratio. Leverage ratios.

Activity ratio :
Activity ratios are calculated to measure the efficiency with which the resources of a
firm have been employed. These ratios are called turnover ratios because they indicate the
speed with which assets are being turned over into sales e.g. debtors turnover ratio.

Profitability ratio :

These ratios measure the results of business operations or overall performance and
effective of the e.g. gross profit ratio, operating ratio or capital employed. Generally, two
types of profitability ratios are calculated.

(a) In relation to sales, and
(b) In relation in investment

32. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
32
FINANCIAL CLASSIFICATION IN VIEW OF FINANCIAL MANAGEMENT
OR CLASSIFICATION ACCORDING TO TESTS



E. CASH-FLOW STATEMENT

A cash flow statement is a statement showing inflows (receipts) and outflows
(payment) of cash during a particular period. In other words, it is a summary of sources and
application of each during a particular span of time.


Objectives of cash flow statement
1. Useful for short-term financial planning.
2. Useful in preparing the cash budget.
3. Comparison with the cash budget.
4. Study of the trend of cash receipts and payments.
5. It explains the deviations of cash from earning.
6. Helpful in ascertaining cash flow various separately.
7. Helpful in making dividend decisions.


Liquidity ratios
Long-term solvency
and leverage ratios
Activity ratios Profitability ratios
Current Ratio –
Liquid Ratio (Acid)
Test Or Quick Ratio.
Absolute Liquid Or –
Cash Ratio.
Debtors Turnover
Ratio – Creditors
Turnover Ratio –
Inventory Turnover
Ratio.
Financial Operating
Composite – Debt.
Equity Ratio – Debt
To Total Capital Ratio
– Interest Coverage
Ratio – Capital
Gearing Ratio.
Inventory Turnover
Ratio. Debtors
Turnover Ratio
Fixed Asset Turnover
Ratio
Total Asset Turnover
Ratio
Working Capital
Turnover Ratio.
Payables Turnover
Ratio Capital
Employed Turnover
Ratio.
In Relation To Sales.
Gross Profit Ratio.
Operating Ratio.
Operating Profit Ratio.
Net Profit Ratio.
Expenses Ratio In
Relation To
Investments Return On
Investments. Return
On Capital. Return On
Equity Capital. Return
On Total Resources
Earning Per Share.
Price Earnings Ratio.

33. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
33






CHAPTER – IV

DATA ANALYSIS AND INTERPRETATION














PROFIT AND LOSS ACCOUNT ON 2016

34. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
34



Profit and Loss Account
Expenditure
Schedule
No
31-03-2016 Incomes
Schedule
No
31-03-2016
Payment Of
Interest On
Deposits
11 1,57,70,507.60
Interest
From The
Investments
1,24,61,726.67
Payment of
Interest On
Loan
9,024.86
Income
from
Interest On
Loan
19 2,27,14,533.00
Bank
Commotion
7,969.00 Commotion 20 1,62,154.72
Salary / PF /
Bonus
12 76,12,474.00
Other
Incomes
21 9,49,614.59
Rent, Tax 13 4,52,000.00

Electricity

2,37,571.00

Traveling
Expenses
87,076.00

Post And
Telephone
14 64,358.00

Printing And
Stationery

59,058.00

Legal Fee 32,000.00

Insurance 15 2,86,510.00

Other
Expenses
16 24,71,365.80

Enclosure

1,39,338.00

Dep, Repairs
& Maintaince
Expenses
17 10,46,182.00

Administrative
Expenses
18 5,88,772.00

Income Tax 22,85,323.00

Net Profit

51,38,499.72




Total 3,62,88,028.98 Total 3,62,88,028.98

35. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
35
BALANCE SHEET AS ON 2016











Date on 31-03-2016 Balance Sheet
Liabilities
Schedule
No
31-03-2016 Assets
Schedule
No
31-03-2016
Authorised
share capital
50,00,00,000.00
Cash in
hand
38,07,097.00
Share capital 1 1,12,05,900.00
Cash at
bank
6 2,17,65,142.87
Reserve fund 2 10,76,96,336.05 Investments 7 14,80,12,898.60
Deposits 3 23,01,61,819.37
Investment
in call
money
75,000.00
Received
loans
4 -
Loans and
advances
8 18,46,35,797.16
Other
responsibility
5 3,52,50,638.14 Misalliance 9 38,75,292.62
Payment of
tax

22,45,914.00
Other
allowances
10 1,87,49,579.05
Net profit

51,38,499.72
Advance in
income tax
33,53,300.00


Total 39,16,99,107.28 Total 39,16,99,107.28

36. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
36
PROFIT AND LOSS ACCOUNT ON 2017




BALANCE SHEET AS ON 2017
Profit and Loss Account
Expenditure
Schedule
No
31-03-2017 Incomes
Schedule
No
31-03-2017
Payment Of
Interest On
Deposits
11 2,11,82,416.25
Interest
From The
Investments
1,50,23,749.56
Payment of
Interest On
Loan
22,843.85
Income
from
Interest On
Loan
19 2,56,04,529.00
Bank
Commotion
6,254.01 Commotion 20 1,17,146.00
Salary / PF /
Bonus
12 75,49,950.00
Other
Incomes
21 14,06,786.21
Rent, Tax 13 4,70,500.00
Electricity

1,85,466.00

Traveling
Expenses
51,523.00

Post And
Telephone
14 83,515.83

Printing And
Stationery

35,301.00

Legal Fee 0.00
Insurance 15 2,76,418.00
Other
Expenses
16 20,38,579.00

Enclosure

1,39,338.00

Dep, Repairs &
Maintaince
Expenses
17 8,90,084.00

Administrative
Expenses
18 8,57,880.00

Income Tax 28,99,156.00
Net Profit

54,62,986.23


Total 4,21,52,211.17 Total 4,21,52,211.17

37. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
37













PROFIT AND LOSS ACCOUNT ON 2018
Date on 31-03-2017 Balance Sheet
Liabilities
Schedule
No
31-03-2017 Assets
Schedule
No
31-03-2017
Official
share capital
50,00,00,000.00
Cash in
hand
18,42,082.00
Share capital 1 1,17,67,970.00
Cash at
bank
6 2,98,56,888.66
Reserve fund 2 11,45,23,535.77 Investments 7 18,63,89,999.36
Deposits 3 27,19,84,657.39
Investment
in call
money
0.00
Received
loans
4 -
Loans and
advances
8 18,98,11,029.00
Other
responsibility
5 2,87,39,465.44 Misalliance 9 32,53,951.60
Payment of
tax

25,43,700.00
Other
allowances
10 2,13,60,385.35
Net profit

54,62,986.23
Advance in
income tax
25,07,978.00

Total 43,50,22,314.83 Total 43,50,22,314.83

38. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
38


Profit and Loss Account
Expenditur
e
Schedul
e No
31-03-2018 Incomes
Schedule
No
31-03-2018
Payment Of
Interest On
Deposits
11 2,05,81,542.32
Interest on
Investments
19 1,36,51,360.81
Payment of
Interest On
Loan
0.00
Interest On
Loans
20 2,88,54,840.00
Bank
Commotion
8,553.66
Commission
and
brokerage
21 2,19,050.28
Salary / PF /
Bonus
12 84,79,825.00
Other
Incomes
22 9,91,232.00
Rent, Tax 13 4,70,500.00
Electricity

1,90,045.00

Traveling
Expenses
69,748.00

Post And
Telegram
14 62,925.00

Printing And
Stationery

67,566.00

Legal Fee 0
Insurance 15 3,38,968.00
Other
Expenses
16 15,08,378.33

Investment
premium
amortisation

1,36,005.00

Dep, Repairs
& Maintaince
Expenses
17 4,47,621.00

Administrativ
e Expenses
18 5,06,302.00

Profit before
tax
1,08,48,503.78


Total 4,37,16,483.09 Total 4,37,16,483.09
Income tax
Provisions
Profit after
tax

31,96,173.33
8,10,000.00
68,42,330.45
Profit before
tax



10848503.78


Total 1,08,48,503.78 1,08,48,503.78

39. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
39
BALANCE SHEET AS ON 2018












Date on 31-03-2018 Balance Sheet
Liabilities
Schedule
No
31-03-2018 Assets
Schedule
No
31-03-2018
Authorised
share capital
50,00,00,000.00
Cash in
hand
75,92,790.00
Share capital 1 1,34,60,100.00
Cash at
bank
6 1,31,73,801.28
Reserve fund 2 11,97,87,262.00 Investments 7 13,13,44,873.00
Deposits 3 30,43,79,608.64
Investment
in call
money
7,50,00,000.00
Received
loans
4 -
Loans and
advances
8 22,20,86,938.18
Other
responsibility
5 2,98,67,252.14 Premises 9 31,28,123.60
Income tax
payable

30,76,800.00
Other
assets
10 2,23,78,849.17
Net profit

68,42,330.45
Advance in
income tax
27,07,978.00

Total 47,74,13,353.23 Total 47,74,13,353.23

40. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
40

ANALYSIS AND INTERPRETATION OF DATA


I. SHORT- TERM SOLVENCY RATIO

There is ratio which measure the short term solvency of financial position of a firm. These
ratios are calculated to comment upon the short-term are paying the capacity of a concern or
the firm ability to meet its current obligations.

The various ratios are :

 Current ratio
 Absolute liquid ratio
 Cash position ratio

41. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
41
1) Current Ratio :-

An indication of a company’s ability to meet short-term debt obligations; the higher
the ratio, the more liquid the company is. current ratio is equal to current assets divided
by current liabilities. if the current assets of a company are more than twice the current
liabilities, then that company is generally considered to have good short-term financial
strength. If current liabilities exceed current assets, then the company may have problems
meeting its short-term obligations.





Current assets (CA)
Current ratio = -------------------------------
Current liabilities (CL)




Table No.1

Year

Current assets
(Rs)
Current
liabilities (Rs)
Ratio
2015-2016 2,17,65,142.87 26,54,12,457.51 0.08
2016-2017 2,98,56,888.66 30,07,24,122.83 0.09
2017-2018 1,31,73,801.28 33,42,46,860.83 0.03

42. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
42
GRAPH SHOWING CURRENT RATIO

CHART NO : 1






No. of year



Interpretation

The standard norm of the current ratio is 2:1 the bank had not
maintained in any of the year, the standard norm of the current ratio form the above
calculation is worth 0.08 in 2015-16 and it has been increased in 2016-17 0.09 and in the
year 2017-18 it has decreased to 0.03.

0.08, 40%
0.09, 45%
0.03, 15%
2015-16
2016-17
2018-18

43. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
43
2) Cash position ratio :-


This is also known as super quick ratio. It is variation of quick
ratio. This ratio establishes the relationship between absolute liquid asset and current
liabilities. Absolute liquid assets are cash in hand, bank balance and readily marketable
securities. Both the debtors and the bills receivable are excluded from liquid assets as three is
always an uncertainty with respect to their realization. In other words, liquid assets minus
debtors and bills receivable are absolute liquid asset. The cash position ratio is calculated as
follows.




Cash + Marketable securities
Cash Position Ratio = ---------------------------------------------
Current liabilities



Table No. 2 :-


Year Cash in the firm
(Rs)
Current
liabilities (Rs)
Ratio
2015-2016 2,17,65,142.87 26,54,12,457.51 0.08
2016-2017 2,98,56,888.66 30,07,24,122.83 0.09
2017-2018 1,31,73,801.00 33,42,46,860.7 0.03

44. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
44
GRAPH SHOWING CASH POSITION RATIO

CHART NO : 2




No of year



Interpretation

The standard norm of the cash position ratio is 2:1 the bank had
not maintained in any of the year, the standard norm of the current ratio form the above
calculation is worth 0.08 in 2015-16 and it has been increased in 2016-17 0.09 and in the
year 2017-18 it has decreased to 0.03.

40%
45%
15%
Series 1
2015-16
2016-17
2017-18

45. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
45
II. LONG TERM SOLVENCY RATIOS

Long term solvency ratio conveys a firm’s ability to meet the interest cost and repayment
schedule of its long-term obligation.

These ratios are helpful to management in proper administration of capital. It also helps
the creditors to know the capacity of a business concern to pay debt in future.


The various ratios are :

 Proprietary ratio
 Solvency ratio
 Fixed assets turnover ratio

46. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
46
3) PROPRIETARY RATIO :-

This ratio establishes the relationship between the shareholders funds and the total assets
of the firm. It establishes the claims of the shareholders on the firm’s assets. It usually is
expressed as a pure ratio.



Shareholders fund
proprietary ratio = ---------------------------------- * 100
total assets





Table no : 3 :-

Year Shareholder’s
fund (Rs)
Total assets (Rs) Ratio in
percentage
2015-2016 3,87,14,871.31 45,76,37,482.03 8.45
2016-2017 3,71,41,514.61 43,06,72,254.83 8.62
2017-2018 4129275253.43 46,71,12,585.23 8.84

47. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
47
GRAPH SHOWING PROPRIETARY RATIO

CHART NO : 3

.


No. of year



Interpretation

The proprietary ratio reflects the financial strength of the bank.
In the year 2015-2016, in proprietary ratio of the bank was 8.45% in the year 2016-2017, it
has increase to 8.62%. in the year 2017-2018, it has increase 8.84 %.


8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
2015-16 2016-17 2017-18
Series 1
Series 1

48. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
48
4) ACID TEST RATIO

As observed above one defect of the current ratio is that it fails to convey any
information on the composition of the current assets of a firm. A rupee of cash is considered
equivalent to a rupee of inventory or receivable. But it is not so. A rupee of cash in more
readily available to meet current obligations than a rupee of say, inventory. This impairs
the usefulness.


Acid test ratio can be calculated as follows:



Quick assets
Acid test ratio = ------------------------------------
Current liability


Table no : 4

Statement showing the calculation of acid test ratio

Year Quick assets Current liability Acid test ratio
2015-16 70.50 324.21 0.21
2016-17 156.44 435.77 0.35
2017-18 148.27 359.79 0.41

49. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
49

GRAPH SHOWING ACID TEST RATIO

CHART NO ; 4






Interpretation:

The above analysis shows that company has held the company has held 0.21 Rs of quick
assets for meeting the 1 rupee of current liability. In the year 2015-16 the company has held
0.35Rs of quick assets for meeting 1 rupee of current liability. In the year 2016-17 the company
has held 0.41 Rs of quick assets for meeting the 1 rupee of current liability.

0
50
100
150
200
250
300
350
400
450
500
2015-16 2016-17 2017-18
Chart Title
Quick assetsCurrent liabilityAcid test ratio

50. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
50
5) Debtor turnover Ratio :

It is determined by dividing the net credit sales by average debtors outstanding during the
year.

Net sales
Debtor turnover Ratio = -------------------------------
Average debtors


Net sales consist of gross sales, if any, from customer. Average debtors is the simple
average of debtors at the beginning and at the end of the year. The analysis of debtor turnover
Ratio supplements then information regarding the liquidity of one time of current assets of the
firm. The ratio measures how papidly debtors are collated. A high ratio is indicate of shorten
time lag between credit sales and cash collection. A low ratio shares that debtor are not being
collected rapidly.

Sales
Debtor turnover Ratio = -----------------------------------
Avg. Debtors

Table no : 5





Year Sales Avg. Debtors DTP
2015-16
3462.53 125.58 27.57
2016-17
4322.57 185.99 23.24
2017-18
4101.61 109.67 37.40

51. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
51
GRAPH SHOWING DEBTORS TURNOVER RATIO

CHART NO : 5






Interpretation:
In the year 2015-16, for every 1 rupee of investment in Debtors Company makes
27.57 times of credit sales.
In the year 2016-17, for every 1 rupee of investment in Debtors Company makes
23.24 times of credit sales.
In the year 2017-18, for every 1 rupee of investment in Debtors Company makes
37.40 times of credit sales.
0
5
10
15
20
25
30
35
40
2015-16 2016-17 2017-18
DEBTORS TURNOVER RATIO
DTP

52. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
52
6) Solvency ratio :-

Solvency ratio is one of the various ratios to measure the
ability of a company to meet its long term debts. Moreover, the solvency ratio quantifies the
size of a company after tax income, not counting non-cash depreciation expense, as
contrasted to the total debt obligations of the firm. Also, it provides as assessment of the
likelihood of a company to continue congregating its debt obligations.



Total Liabilities
Solvency Ratio = ----------------------------------------------
Total Assets



Generally lower the solvency ratio, more satisfactory or
stable in the long-term solvency position of a firm.


Table no : 6

YEAR TOTAL
LIABILITIES
(Rs)

TOTAL ASSETS
(Rs)
RATIO IN
PERCENTAGE
2015-2016 45,76,37,482.03 45,76,37,482.03 1
2016-2017 43,06,72,254.83 43,06,72,254.83 1
2017-2018 46,71,12,585.23 46,71,12,585.23 1

53. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
53

GRAPH SHOWING SOLVENCY RATIO

CHART NO : 6







Interpretation:

The above rations show 1% in the year 2015-16. It has also remained the
same in the year 2016-17 and 2017-18.


0
0.2
0.4
0.6
0.8
1
1.2
2015-16 2016-17 2017-18
RATIO
ratio

54. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
54
7) Fixed Asset Turnover Ratio


The fixed assets turnover ratio measures the efficiency with which the firm has been
using its fixed assets to generate sales. It is calculated by dividing the firm’s sales by its net
fixed assets as follow :




Fixed Asset
Fixed Asset Turnover Ratio = -----------------------------------
Net worth




Table no : 7


YEAR TOTAL ASSETS
(Rs)

TOTAL
LIABILITIES
(Rs)
RATIO IN
PERCENTAGE
2015-2016 25,83,427 45,76,37,482.03 0.15
2016-2017 7,01,478 43,06,72,254.83 0.13
2017-2018 5,82,181 46,71,12,585.23 0.12

55. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
55

GRAPH SHOWING FIXED ASSET TURNOVER RATIO


CHART NO : 7







Interpretation:

The fixed turnover ratio of the bank was 0.15%, in the year 2015-2016. In the year of
2016-17, it has been decreased to 0.13%. In the year of 2017-18, it has slightly
degreased to 0.12%.
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
2015-16 2016-17 2017-18
Ratio
Ratio

56. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
56
III. Profitability RATIOS

Profits are measure of overall efficiency of a business. Higher the profit the more efficient is
the business.
In other words they are the ratios, which reveal the total effect of business transaction
and indicate how far the organization has been successful its operation.


These ratios are:

 Return on Equity
 Return on total resource
 Net profit ratio
 Operating Expenses ratio

57. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
57
8) Return on Equity:-

It indicates how the firm has used the resources of owners. This ratio is one of
the most important ratios in financial analysis. The earning of a satisfactory return is one of
the most desirable objectives of a business. The ratio of the net profit to owner’s equity reflects
the extent to which the objective has been accomplished.


Profit after tax
Return on Equity = ------------------------------- * 100
Equity share capital



TABLE NO: 8

YEARS
Net Profit
(Profit of the Tax)
Equity share
capital
RATIO (in %)
2015-16 45,49,362.39 1,11,49,800 40.80
2016-17 2,69,84,480.99 1,17,11,870 230.40
2017-18 2,98,54,072 1,34,04,100 222.72

58. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
58

GRAPH SHOWING SOLVENCY RATIO

CHART NO : 8









Interpretation


The ratio indicates the return on equity. The return on equity in the year 2015-16 it
increases to 40.80% and 2016-17, 230.40% and in the year 2017-18 222.72%.

0
50
100
150
200
250
2015-16 2016-17 2017-18
RATIO (IN %)
RATIO (in %)

59. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
59

9) Return on Total Resource:-

Return on total resource or total assets ratio is the ration of net profit to total
resource or total assets. Return here means net profit after taxes and total resource mean all
realizable assets including intangible assets, if they are realizable. This ratio measures the
productivity of the total resources of a concern.








Net Profit
Return on Total Resource = --------------------------- * 100
Net Assets






TABLE NO: 9

YEAR Net Profit Total Assets RATIO (in %)
2015-16 45,49,362.39 45,76,37,482.03 0.09%
2016-17 2,69,84,480.99 43,06,72,254.83 0.06%
2017-18 2,98,54,072 46,71,12,585.23 6.39%

60. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
60

GRAPH SHOWING RETURN ON TOTAL RESOURCE

CHART NO : 9











Interpretation

The ratio indicates the return on fixed assets and current assets. The return on assets in
the year 2016 it increases to 0.09%, in 2017 it increases to 0.06% and in the year 2018
increases to 6.39%.

0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
2015-16 2016-17 2017-18
RATIO (in %)
RATIO (in %)

61. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
61


10) Earnings per Share


The ratio establishes the relationship between profits after tax to number of equity
shares.




Profit after tax
Earnings Per Share = ------------------------------------
Number of Equity Shares






TABLE NO : 10




YEAR Net Profit
No of Equity
Shares
Earnings per
share
2015-16 45,49,362.39 3,000 1,516
2016-17 2,69,84,480.99 3,000 8,995
2017-18 2,98,54,072 3,000 9,951

62. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
62

GRAPH SHOWING EARNINGS PER SHARE


CHART NO : 10









Interpretation


The earning per share for the year 2016, it was Rs 1,516 2017 it was 8,995 in the year
2018 it was 9,951

0
2,000
4,000
6,000
8,000
10,000
12,000
2015-16 2016-17 2017-18
Earnings per share
Earnings per share

63. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
63


2) Interest Payout Ratio:



It establishes the relationship between interest paid and earnings before tax
and interest.





Interest Paid
Formula = ------------------------- *100
EBIT






EBIT= Profit for the year + Interest paid + Tax






TABLE NO : 11

YEAR Interest paid EBIT
INTEREST
PAY OUT
RATIO
2015-16 2,77,14,553 18,46,35,797.16 15.01
2016-17 2,56,04,529 18,98,11,029.86 13.48
2017-18 2,88,54,840.00 22,20,86,938.18 12.99

64. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
64

GRAPH SHOWING INTEREST PAYOUT RATIO:


CHART NO : 11
















Interpretation


The interest payout ratio in the year 2015, 2016 and 2017 decreases continuously.



11.5
12
12.5
13
13.5
14
14.5
15
15.5
2015-16 2016-17 2017-18
INTEREST PAY OUT RATIO
INTEREST PAY OUT RATIO

65. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
65




CHAPTER – V



 Findings
 Suggestions
 Conclusion

66. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
66
FINDING
1. The bank is in secured position to creditors
2. The banks are providing good services
3. The total assets of the bank is also increased from year to year
4. The financial position of the bank is in good position and the culture of the bank is
also good
5. The Current ratio has shown in fluctuating trend as 0.08, 0.09 and 0.03 during 2017
- 18 of which indicates a continuous increases in both current assets and current
liability.
6. The cash position ratio is also in a fluctuating trend through out of the parent 2016
- 18 resulting as 0.08, 0.09 and 0.03 which indicates a continuous increase in both
cash and the current liabilities, So the company’s present cash position is good.
7. The proprietary ratio has shown a fluctuating trend. The proprietary ratio is
decreased compared with last year. So, the long-term solvency of the firm is
decrease.
8. The solvency ratio has shown consistent compared with the last two years. So the
solvency of the firm is constant.
9. The fixed assets turnover ratio is in decreasing trend for the year 2016-18 ( 0.15,
0.13, and 0.12). It includes that the company is not efficiently utilising the fixed
assets.
10. The earnings per share was high in the year 2015-16 i.e., 1,516. That is increase in
the year of 2016-17 and again increase the rate to 8,995 in the year 2017-18, because
number of equity are constant and the net profit is increased. In the current net profit
is increased due to the increase in operating and maintenance fee. So the earnings
per share is increased.
11. Return on total resource ratio indicates that return on fixed assets and current assets.
The return on assets in the year 2015-16 as 0.09% in the year 2016-17 it was 0.06%
in the year 2017-18 it increases to 6.39%.
12. The return on equity is increased compared to last two years both of profit and
shareholders funds increase the cause an increase in the ratio.
13. The bank as good relation with its customers. The customers are satisfied with the
relationship manager service provided by C.B.S bank.

67. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
67
SUGGESTIONS

After my detailed study, I wish to suggest few things which I have noticed during the
study. Those are as follows:

 Bank should undergo market innovation
 Bank should maintain close interaction with the borrower so that loan can be recovered
easily.
 The bank should give still more services to the customers.
 The bank really should arrange program to make people learn online banking so that
the customers do not have to rush to banks which ultimately save their time also.
 The knowledge regarding how to do the online banking and basic computer operating
knowledge is necessary to customer should have knowledge of it.
 Diversification of banking activities.
 It has to deliver with the transaction related services in order to get more customers.

68. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
68
CONCLUSION

The study entitle “A Study of Financial Statement Analysis of SHREE
CHANNABASAVASWAMY SOUHARDA SAHAKARI BANK NIYAMITA ” has been
undertaken with the objective to analyse and interpret the bank’s financial performance. The
analysis of the bank was undertaken with the help of ratios, which are important tools of
financial analysis.

In general, the bank has achieved tremendous progress over the recent years. The
bank has a healthy financial performance. The bank has been able to achieve heavy growth
across multiple parameters, including customer’s acquisition, business volumes and revenues.

We can say that the liquidity of the bank is favourable, the short – term solvency
position of SHREE CHANNABASAVASWAMY SOUHARDA SAHAKARI BANK
NIYAMITA Bank Limited remains healthy.

The proprietary ratio reveals that the net worth of the company is sufficient to finance
the assets of the bank.

As my study in the bank was satisfactory. CBS bank, one of
the co-operative bank has been performing quite better. If it meets the dynamic needs of
present customers then it can still be the best. The bank is well furnished and accustomed in
all views. According to me today banking scenario is total customer focused. Today all most
all Banks are ensuring and meeting customer needs. In spite of RBI being the regulator for
the banks, There as being stiff competition among banks. The concerted efforts put in by the
management and staff of CBS bank has helped the bank in achieving a remarkable progress
in almost all the important parameters. The bank is marching ahead in the direction of
achieving the number-1 position in the co-operative banking industry. The thorough study on
service of CBS bank, I can conclude that the bank position is at a good position. Particularly
the current years position is well due to raise in the profit level from the last year position, it
is better for the bank to diversify the funds to different sectors in the present market scenario.

69. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
69


ANNEXURE
Bibliography

70. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
70
BIBLIOGRAPHY
Name of the Book Author Publisher Edition
Financial
management
M.Y. Khan and
P.K. Jain
Tata McGraw hill 3
rd
edition
Financial
management
I.M. Pandey Vikas Publishing
House Pvt Ltd
8
th
edition
Fundamentals of
Financial
management
Prasanna
Chandra
Tata McGraw hill 5
th
edition
Financial Accounting P.C. Tulisian Pearson education
India
1
st
edition
Financial Statement
Analysis
Wild Thomson Cengage
learning ltd


Annual reports of the company
WEB SOURCES
1. www.google.com
2. www.business dictionary.com
3. www.business banking.o.z.g.com
4. www.wikipedia.com
5. www.sideshare.com

71. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
71
QUESTIONNAIRES


1. What type of ratio helps determine a company’s ability to generate sufficient cash to
meet its obligations?
a. Liquidity ratios
b. Profitability ratios
c. Activity ratios
d. Leverage ratios

2. Which of the following is not included in current assets?
a. Debtors
b. Stock
c. Cash at bank
d. Cash in hand

3. Which of the ratio helps assess how effectively a company uses its assets?
a. Liquidity ratio
b. Profitability ratios
c. Activity ratios
d. Leverage ratios

4. Which is not one of the 4 different methods of analyzing financial statements?
a. Ratio analysis
b. Trend analysis
c. Lateral analysis
d. Vertical analysis

5. The most precise test of liquidity is.
a. Quick ratio
b. Current ratio
c. Absolute Liquid ratio
d. None of the above

6. Current ratio is stated as a crude ratio because
a. It measures only the quantity of current assets
b. It measures only the quality of current assets
c. Both a & b
d. Offerings dimension

7. Which ratio is considered as safe margin of solvency?
a. Liquid ratio
b. Quick ratio
c. Current ratio
d. None of the above

72. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
72



8. Liquid ratio is also known as.
a. Quick ratio
b. Acid test ratio
c. Working capital ratio
d. Stock turnover ratio

a. A & B
b. A & C
c. B & C
d. C & D

9. Debt-equity ratio is a sub-Part of
a. Short-term solvency ratio
b. Long –term solvency ratio
c. Debtors turnover ratio
d. None of the above.

10. While calculating earnings per share, if both equity and preference share capitals are
there then.
a. Preference share is deducted from the net profit.
b. Equity share capital is deducted from the net profit.
c. Both A & B
d. None of the above.

11. Return on equity capital is calculated on basis of:
a. Funds of equity shareholders
b. Equity capital only
c. Either A or B
d. None of the above.

12. Return on proprietors funds is also known as:
a. Return on net worth
b. Return on share holders fund
c. Return on share holders’ investment
d. All of the above.

13. Overall Profitability ratios are based on:
a. Investments
b. Sales
c. Both A & B
d. None of the above.

73. “A Study On Financial Statement Analysis On C.B.S Bank Gangavathi.”
S.K.N.G. GOVT FIRST GRAED COLLEGE, GANGAVATHI
73


14. Which of the following statements are true about ratio analysis?
a. Ratio analysis is useful in financial analysis
b. Ratio analysis is helpful in communication and Co-Ordination.
c. Ratio analysis is not helpful in identifying weak spots of the business.
d. Ratio analysis is not helpful in financial Planning and forecasting.

a. A, B & D
b. A, C & D
c. A, B & C
d. A, B, C, D.

15. Which of the following are limitations of ratio analysis?
a. Ratio analysis may result in false results if variations in price levels are not
considered.
b. Ratio analysis ignores qualitative factors.
c. Ratio analysis ignores quantitative factors.
d. Ratio analysis is historical analysis is

a. A, B & D
b. A, C & D
c. A, B & C
d. A, B, C, D.